Using the Cobb Douglas production function to find the optimal structure of tomato production in greenhouses


1Agriculture University of Tirana, Albania.

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The agricultural sector is considered as the most important sector, which affects the development of the Albanian economy. The proposed reforms have been based on the need to increase transparency, accountability, effectiveness and efficiency in performing tasks in the agricultural sector. The government’s attention should be focused on support of competitiveness of Albanian products, taking measures to improve the domestic market. This would reduce imports and increase exports. Among the key elements to stimulate the agricultural sector is to increase the production capacity in greenhouses. Greenhouse production should focus on those commercial products, such as the cultivation of vegetables or potatoes, which our farmers produce with less expense than other countries. This study analyzes the economic impact of some factors such as fertilizers, pesticides, irrigation, etc. and production. The study extends to 16 farms in the Lushnja region and focuses on the activity of tomato production in greenhouses. We used Cobb-Douglas production function to analyze the influence of some inputs in one output(tomato production). We have built the Lagrange function (LC) to minimize the cost of tomato production. An important conclusion of this study is that maximum revenue and profit maximization reached at the same point on the expansion path where the cost is minimal.The optimal structure of the tomato in this region was found using the necessary conditions for the minimum of LC.

Keywords: optimal structure; Cobb-Douglas function; tomato production; Lushnja region.

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